Benefits + Efficiency
The latest from the Cincinnati Enquirer on beneficiency.net. With the recent COBRA legislation from ARRA, this can assist in managing critical compliance dates with your employee benefit plans.
http://news.cincinnati.com/article/20090411/BIZ01/904110348/1001/BIZ
Below is a brief synopsis from the Cincinnati Enquirer explaining the newly enacted COBRA and premium subsidy program.
For a full explanation, please contact the Department of Labor, legal counsel or your COBRA administrator.
Current compliance will cover two primary groups: COBRA eligible employees from 9/1/08 to 2/17/09 and from 2/17/09 and forward.
Business owners should begin compliance with the following steps:
STEP #1 – Identify all COBRA-eligible employees who were Involuntarily Terminated between Sept. 1, 2008, and Feb. 17, 2009. If Voluntary Termination is elected, an appeal process is granted to the individual through the Department of Labor (DOL) or Health and Human Services (HHS). DOL and HHS will have 15 days to respond.
STEP #2 — Go to Department of Labor website and download the Model Notices. The notices should then be updated to include your company provisions, plan specifics and contact information.
HTTP://www.dol.gov/ebsa/COBRA.html
STEP #3 — Before April 18, notices must go out to COBRA-eligible workers or those with Qualifying Events who lost coverage from 9/1/08 to 2/16/09.
STEP #4 — Election period is open for 60 days to former employee or COBRA eligible and retroactive to 3/1/09.
STEP #5 — Determination of whether election is eligible for premium subsidy – Assistance Eligible Individual (AEI).
Who is an AEI?
STEP # 6 — Recovery of 65% premium subsidy through a credit on company payroll taxes. Once premium is received by company, the company adds employee back to insurance billing retroactive to March 1 or qualifying effective date. Premium is paid in full and then credit is taken from payroll taxes.
STEP #7 — Employees terminating after 2/17/09 should receive the General Notice (Full Version) that gives explanation of premium subsidy through December 31, 2009.
NOTE: There is much language contained in the legislation not included in the synopsis. Our goal is to get a list of steps needed to comply for immediate compliance needs. For further information and guidance, contact DOL, legal counsel or COBRA administrator. This is only a summary of the legislation.
Mini-COBRA (2-19 employees) — many states are still trying to resolve compliance with the legislation. Since the states regulate insurance carriers and not employers, the burden of the subsidy will, most likely, fall to the insurance companies for managing the billing and recovery of the premium subsidy. More to come on this situation as the carriers have until April 18th to notify terminated employees.
If you would like information on how to institute a simple and inexpensive technology that will send email alerts and reminders to HR, brokers and/or advisors on termination or elibility events, contact Beneficiency.net at 859-431-3360. Beneficiency is a web-based application that will electronically push email alerts on critical eligibility and termination events while connecting to your COBRA administrator.
Stay tuned for more updates.
Electronic notification for benefits compliance
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COBRA tasks ex-employers | Cincinnati Enquirer | Cincinnati.Com |
http://waysandmeans.house.gov/media/pdf/110/cobra.pdf
This is a link to a summary from the Committe on Ways & Means Committee relating to the recently proposed stimulus package and how COBRA will be altered by the recovery package.
For those brokers, HR professionals and advisors working with companies that are currently eligible for COBRA, it is highly recommend you stay in touch with this legislation. Once released in final form, it could cause additional administration, liability issues and cash flow concerns.
